Distinction between Negotiation and Assignment


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Distinction between Negotiation and Assignment:-

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Basis

Negotiation

Assignment

Applicable Act If a negotiable instrument is transfer by way of negotiation, Negotiable Instrument Act, 1881 applies. Where any right is transfereed by way of assignment, the Transfer of Property Act applies.
Meaning           Negotiation means transfer of a negotiable instrument to any other person so as to constitute that person the holder of such negotiable instrument. Transfer of a right to receive the payment of a debt by one person (viz., assignee) to another person (viz., assignee) by way of a written document is called as assignment.
Scope Negotiation can be made for transferring negotiable instrument only. Assignment can be made of any right.
Method or manner A bearer instrument can be negotiated merely by deliver, and an order instrument can be negotiated by endorsement and delivery. Assignment is valid only if it is made in writing and is signed by the assignor.
Notice Notice of negotiation is not required to be given to any party. Notice of assignment must be given by the assignee to the debtor.
Consideration It is presumed that every negotiable instrument was negotiated for consideration. There is no such presumption in case of assignment.
Burden of proof The other party has to prove that negotiation was without any consideration. The assignee has to prove that there some consideration.
Better title The transferee of a negotiable instrument acquires a title better than that of the transferor, i.e; he becomes a holder in due course. The assignee does not acquire a title better than that of the assignor.
Stamp duty Negotiation does not require payment of stamp duty. Assignment requires payment of stamp duty.

 

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